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Publications of LGE Environmental Report LG Electronics 2012 Environmental Report CONTENTS 04 / Environmental Report Overview Corporate Profile 06 / CEO Message CTO Message 08 / 2012 Highlights 10 / GREEN INITIATIVE 18 / CLIMATE CHANGE 24 / GREEN BUSINESS RESPONSE Green Vision and Strategy Strategic Directions for Photovoltaics Solution Green Management System Climate Change Response Lighting Green Communication GHG Emissions Management Water Treatment Solution Global Volunteer Day Zero Energy America Project™ Smart Grid 15 19 23 46 / APPENDIX Data GRI Index Independent Assurance Statement Green Management History Publications of LGE Environmental Report 2 28 / PRODUCTS AND 38 / GREEN PARTNERSHIP 42 / RESOURCE RECYCLING TECHNOLOGIES Strategic Directions for Products Green Program Plus Use of Recycled Plastics with Greener Features Supplier Training e-Waste Management Management for Developing Products Green Partnership Activities Green Initiatives at LGEUS with Greener Features 2012 Achievements LGE's Energy-efficient Products 34 45 This report contains some “forward-looking statements” - that is, statements related to future, not past events. In this context, forward-looking statements often address our expected future business performance and intentions, and often contain words such as “expect”, “anticipate”, “intent”, “plan”, “believe”, “seek”, “see”, or “will”. Foward-looking statements by their nature address matters that are, to different degrees, uncertain. These uncertainties may cause our actual future results to be materially different from those expressed in our forward-looking statement in this report. 2012 LG Electronics Environmental Report 3 Environmental Report Overview This report has been published by LG Electronics(hereinafter referred to as "LGE"). The aim of this publication is to promote com- munication with stakeholders about LGE’s green management performance and efforts to improve sustainability. This report has also been validated independently by a third-party agency : Korea Productivity Center. LGE's Environmental Report will be pub- lished as part of our ongoing efforts to promote green management and contribute to environmental protection initiatives. Period This report is based on data from January 1, 2012 to December 31, 2012. Scope The scope of this report includes both foreign and domestic (Korean) information. We are work- ing to establish a world-wide environmental data management system to assist in information gathering. Publication This is LGE's Environmental Report, published in July 2013. This report can be found on our website at http://www.lg.com/global Audience This report targets LGE's stakeholders with an interest in the company's environmental perfor- mance. References Environmental report guidelines from the Korean Ministry of Environment, the GRI(Global Re- porting Initiative) Sustainability Reporting Guidelines Version 3.1, and FTC(Federal Trade Com- mission) Complying with the Environmental Marketing Guide Part 260 were used as reference material. Environmental report guidelines from the Korean Ministry of Environment, the GRI (Global Reporting Initiative) Sustainabil- ity Reporting Guidelines Version 3.1, and FTC (Federal Trade Commission) Complying with the Environmental Marketing Guide Part 260 were used as reference material Tel +82-2-526-4123 E_mail [email protected] For more information, visit LGE's website at www.lg.com/global Business Areas and Key Product Families Home Entertainment Mobile Communication · LCD TV · PDP TV · LCD Monitor · Mobile Handset · Home Theater · Smartphone · PC · Audio & Video · Security System 4 Corporate Profile Unit : KRW Billion (as of December 31, 2012) Total Assets Organization Name LG Electronics, Inc. 31,457.4 (-1,201.1) (Consolidated) Location of LG Twin Towers, 128 Yeoui-daero, Total Liabilities 18,753.2 (-757) Headquarters Yeongdeungpo-gu, Seoul, Korea (Consolidated) 25,427.2 (-2,669.9) Industry Manufacturing Parent [Korea : 7,833.4/ Sales Overseas : 17,593.8) TV, Home Theater System, BluRay Player, Consolidated 50,960 (-3,296.6) Mobile Handset, Laptop Computer, Re- frigerator, Washing Machine, Cooking Main Appliance, Built-in System Kitchenware, Parent 42.8 (+306.7) Products Operat- Vacuum Cleaner, Health Care Appliance, ing Air Conditioner, Monitor, Security System, Profits Consolidated 1,136 (+757) Commercial Display, etc. AA (Korea), Baa2 CEO Bon Joon Koo Credit Rating (Moody’s), BBB- (S&P) Date of October 1, 1958 No. of Shareholders 213,750 Establishment 86,697 No.of Employees No. of Shares 180,833,806 [Korea:36,378/Overseas : 50,319] * The calculation method for operating profits was revised in line with the changes to financial accounting standards in 2012, and past data was also revised accordingly. *( ) : Change in figures compared with the previous year Home Appliance Air conditioner & Energy Solution · Refrigerator · Washing Machine · Residential Air Conditioner · Kitchen Appliance · Commercial Air Conditioner · Vacuum Cleaner · Solar Energy Solution · Healthcare Appliance 2012 LG Electronics Environmental Report 5 CEO Message With worldwide interest in environmental issues on the rise, corporate responsibilities have become increas- ingly important. Some companies fail to properly respond to these challenges, and significantly damage their sales; others successfully build their brand image among customers by meeting their environmental obli- gations. In proper perspective, environmental stewardship now entails far more than corporate slogans or mottos—it directly impacts the sustainability of a company. Thus, a company’s management philosophy or strategy should be developed to support emerging environmental standards. Since declaring our corporate policy for a "Cleaner Environment" in 1994, we have consistently organized affiliated organizations and established an internal strategy to implement and expand green management within the company. In 2010, the LG Group announced "Green 2020" as a recommended blueprint for the direction of long-term prosperity for LG Group over the next 10 years. According to this vision, LG Group plans to reduce 40% of greenhouse gas emissions per production unit and 30% of water use by 2020 compared to the base year 2009. Second, LG Group will expand the proportion of low pow- er, high efficiency products and develop environment-con- sidered materials for application, thus establishing prod- uct leadership in the market. As a result, we will be able to reduce the amount of greenhouse gases generated through product use by 30 million tons and cumulatively by 0.2 billion tons by 2020. Third, LG Group has established a goal to consistently strengthen green businesses and successfully generate at least 15% of revenues from them by 2020. To achieve this goal, we will pursue green values and concurrently lay the foundation for leading the market. From now on, LGE will put forth its best efforts to create values for customers that will enable them to lead affluent lives in a healthier and cleaner environment. We sincerely look forward to your consistent interest, advice, and support. July 2013 CEO and Vice Chairman of LG Electronics Bon Joon Koo 6 CTO Message A key driving force behind technology innovation is the prevailing culture of the time. In today’s society, busi- nesses need to become a leading cultural force that enriches people’s lives with competitive products. Such cultural leadership, supported by our products and technologies, will become the defining feature of a truly sustainable business in our times. With these perspectives, we are implementing "Greenovation" based on our green vision in order to meet the environmental needs of both our customers and the society. Our company makes substantial investments in the development of competitive products and technology. We have reduced the amount of greenhouse gas emissions associated with production and product use, and voluntarily acquire carbon certificates as we consistently share our environmental dedication with customers. We have also developed and launched energy efficient products, an effort widely recognized for excellence all over the world. In 2012, our company succeeded in winning the "ENERGY STAR Partner of the Year” Award from the U.S. Environmental Protection Agency (EPA) for the second year in a row, and our 42-inch TV received the "Global Efficiency Medal" from Super-Efficient Equipment and Appliance Deployment (SEAD) in recognition of LGE’s excellent products and technologies. Besides product innovation, we are also trying to reduce greenhouse gases emitted from our business sites or logis- tics, etc. We are bringing more high-efficiency energy facili- ties, and organizing energy supervision groups that operate continually within our company. During peak times of ener- gy consumption, we execute power saving tasks and make multi-dimensional efforts to reduce energy use. Thanks to these efforts, we have been selected for four consecutive years as the most excellent company that responds to cli- mate change by the Korean Carbon Disclosure Project. In addition to these efforts, we are striving to strengthen our green businesses, which have emerged as our next-generation growth engines. We are currently focusing our efforts on building concrete foundations in photovoltaics solution, lighting, water treatment solution, and smart grid by participating in verification proj- ects and conducting Open Innovation activities. We are committed to expanding these green businesses and will continuously develop the core competencies. We are also making efforts to establish
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